Google May Be Ready to Sell Part of Motorola, but Who Will Buy?

If you were mesmerized by Apple news this week, you might have missed the scoop from The New York Post suggesting that Google is putting the Motorola set-top business on the chopping block. So far it doesn’t appear that anyone else has confirmed the report, but no one’s terribly surprised by it either. Google has enough of an integration mess on its hands without adding set-tops to the list. And while I speculated on some of the potential advantages for Google last year, I would have been more surprised than not to see the company try to make a go of it in cable.

So with that out of the way, who could potentially be interested in the Motorola cable portfolio? It’s important to note that the products include a lot more than just set-tops. There’s also encoding, content management, security, and access network technology. (Full Disclosure: I still do some contract work for the network infrastructure portion of the business.) Jeff Baumgartner has speculated here and here about who might be interested. The potential suitors mostly differ depending on which set of Motorola assets we’re talking about, but there are couple that might be willing to take a flyer on the whole bag of tricks, namely Arris and Ericsson.

Meanwhile, Jeff mentioned one company that had me spitting coffee across the table. He wasn’t talking about an acquisition, but he did suggest TiVo might be in a position to help fill in the gap left if Motorola exited the set-top biz. Yes, TiVo. After all the years of fighting for toehold in the cable industry (and even times when Motorola at least unofficially considered acquiring the company), the idea that TiVo might come out on top here is irony at its finest. There’s nothing to say that will actually happen, but even that there’s editorial consideration of the idea has me chuckling and shaking my head. Here’s what Jeff had to say about TiVo:

It’s been a painful and sometimes downright ugly process, but TiVo’s cable strategy is paying dividends as it sees subscribers rise to new levels thanks to MSO partnerships. Cable’s starting to take a real shine to TiVo’s UI and over-the-top video capabilities. Also, TiVo gives cable a line into the retail market.

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7 responses to Google May Be Ready to Sell Part of Motorola, but Who Will Buy?

TiVo was the 1st name that popped into my head as well. With their Dish money + bridge financing they could buy Motorola, but would likely have to take on a lot of debt. It would certainly put them in a unique position and would be an interesting combo, but would carry a ton of risk.

Could tivo leverage what they learned from the Comcast/Tivo disaster into software for Moto boxes? Can they leverage search into the new boxes?

It makes a lot of sense, but after years of waiting, I don’t think Tivo has the technical chomps. That being said, there is a big ass opportunity with tablets and for once Tivo is saying the right things.

Tivo doesn’t really have the cash to do this, and taking on the debt, as pointed out by an earlier post, is NOT where Mr. Rogers wants to take TiVo. But more importantly, TiVo’s current strategy of gaining MSO acceptance is, finally, seeing some results, and without have to take on a ton of debt. It would seem Mr. Rogers looks to be MAKING money with new patent settlements and MSO partnerships, not SPENDING it to take Moto’s place in line and have more crushing debt.

I think it more likely that we could see one of TiVo’s longtime court-buddies buy certain parts Moto: Echostar (Under the Charlie Ergan umbrella that includes Dish Network). Echo has been trying mighty hard to get into the MSO game, and with a great product: the 922 and now Hopper architecture (with one cable company even advising subscribers to use Sling, a company owned by Echostar) While doing pretty well outside the US, Echostar has only had success with very small MSO’s, but they really want in here in the US and with the biggest MSO’s, but given that Echostar’s sister company (Dish) is a competitor, the big guys just may not trust them. Buying Moto puts in major league MSO land overnight, and with the opportunity to gain that trust as Echostar is trying extremely hard to an MSO provider, not just for Dish.

At some point, Charlie may sell Dish, but Echostar will provide him with a business to run, and guys like Ergan just can’t retire.

Certainly there are suitors for the non-STB business that make sense as Jeff Baumgartner suggests. But the most obvious suitors for the STB part seem more likely Samsung, Pace, etc not Arris or Ericsson.

If Motorola does sell off the STB part it will be a sad day. I’m not much of a Google fan in many ways, but the US Cable Industry could certainly use some shaking up, and Google did seem like one of the few companies with the moxie and technical chops to take a shot at it. Not that I would have bet on them succeeding or anything, just that any chance of doing something about the horrid state of US Cable (why everyone keeps pining for Apple to come save them), but there was a chance.

Eh, I can see SageTV manifest itself in Google TV and/or Android devices, wether or not they hold onto Motorola’s STB business. As far as suitors, well I’d say the most likely move is Moto… buying Moto. Getting the STB business back at a discount and paired to their infrastructure stuff. Beyond that, I’m not sure Pace or Samsung would bother acquiring them – better to let someone else bungle it or atrophy during a transition and steal their business. Bobby’s thought that Echostar could make a play is interesting – they have been trying (unsuccessfully) to break into cable here in the US.

TiVo does far better work with hardware than Moto – they both have skimpy software resources. One of the main reasons TiVo is still here is they never had any large amount of debt, so adding that now would indeed be crushing.
So Moto makes sense strategically, buy a nice chunk of business, and does make the thought come to mind. I agree with others here however that the bottom line business aspects do not work out.

Ergen ever have any bad blood with Moto? THat would make him dig his heels in and ignore the sale.